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Ratified Release Precluded Employment Discrimination Action

The First Department reversed Supreme Court and granted defendant’s motion to dismiss plaintiffs employment discrimination, retaliation and hostile work environment claims.  Plaintiffs signed a release and received severance pay based upon the terms of the release.  The First Department determined plaintiffs’ claims that the signed the release under duress were foreclosed by their ratification of the release (accepting the severance pay):

The motion court should have dismissed the complaint in its entirety. “Generally, a valid release constitutes a complete bar to an action on a claim which is the subject of the release” …. A release will not be treated lightly because it is a “a jural act of high significance without which the settlement of disputes would be rendered all but impossible” …. Where the language is clear and unambiguous, the release is binding on the parties unless it is shown that it was procured by fraud, duress, overreaching, illegality or mutual mistake … . *  *  *

Assuming arguendo that issues of fact exist as to duress and overreaching, plaintiffs are nevertheless barred from challenging the releases on those grounds because they ratified the releases. Ratification occurs when a party accepts the benefits of a contract and fails to act promptly to repudiate it…. Thus, a plaintiff cannot claim that he or she was compelled to execute an agreement under duress while simultaneously accepting the benefits of the agreement …  Allen v Riese Org, Inc, 2013 NY Slip Op 03547, 1st Dept, 5-16-13

 

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